2017 Factor Alpha Newsletter
International ADR

Categories Investing, OSAM Research

While investors have long enjoyed the growth in U.S. equities (usually the largest allocation in their overall portfolio!), regional leadership is a cyclical pattern. At some point, it is very likely the U.S. will no longer be the highest-performing market globally. Huh?1 Sure, the U.S. equity market has risen 293% since its credit crisis bottom in March 2009 — versus Developed International and Emerging Markets “mere” rise of 150% and 154%, respectively. Well, this 2Q17 International ADR2 (IADR) edition of the Factor Alpha Newsletter, dispassionately, sans headlines and other noise, compares our built-in-house multi-factor themes to the MSCI ACWI ex U.S.3

Continue reading “2017 Factor Alpha Newsletter
International ADR”

5 Ways a Factor Alpha Approach
Can Boost REIT Portfolios

Categories Author: Chris Meredith, Author: Travis Fairchild, Investing

Here’s what we found:

  • The public real estate market is uniquely inefficient and a fertile ground for active, factor-based investing.
  • Real estate is a diversifying asset class with many benefits, but most investors are under-allocated.
  • Public REITs offer complementary exposure while avoiding the drawbacks and barriers to entry of private real estate, but with lower fees and no loss of performance. 

Continue reading “5 Ways a Factor Alpha Approach
Can Boost REIT Portfolios”

Visualizing Factors & Themes — What You See is What You Get

Categories Insight, OSAM Research, Value, Yield

“Is there a point where index funds theoretically can’t work a course?” asked Charlie Munger at this year’s Daily Journal Corporation Annual Meeting.1 “If everybody bought nothing but index funds, the whole world wouldn’t work as people expect.”

We agree.
So to help animate Munger’s premonition in real-time (see the cheery motion graphics below), our Team’s Developer / Performance Analyst)2 rolled up his coding sleeves and hacked into our “Factor Style Grid”.  Continue reading “Visualizing Factors & Themes — What You See is What You Get”

They Can’t All Be That Smart
A Due Diligence Framework for Factor Investors (Part 2)

Categories Author: Chris Meredith, Insight, Investing

Part 1 of this article delineates factor-based strategies — fundamental weighting,1 smart beta, and Factor Alpha — by showing the differences between them. Also covered in Part 1 is a comparison of risk-focused and return-focused factor implementation.2

Part 2 covers how risk controls3 and using Active Share4 can help determine the alignment between factors and portfolio construction for, as well as the fees you should expect to pay.
Continue reading “They Can’t All Be That Smart
A Due Diligence Framework for Factor Investors (Part 2)”

They Can’t All Be That Smart
A Due Diligence Framework for Factor Investors

Categories Author: Chris Meredith, Insight, Investing

Not all factor products are smart. This article delineates factor-based strategies — fundamental weighting, smart beta, and Factor Alpha — by showing the differences between them. It also provides a framework1 for determining the alignment between factors and portfolio construction, as well as the fees you should expect to pay.  Continue reading “They Can’t All Be That Smart
A Due Diligence Framework for Factor Investors”

2017 Factor Alpha Newsletter
Small Stocks

Categories Investing, OSAM Research

So far in 2017, investors saw how multi-factor exposure to Value — in concentrated portfolios — can be beneficial in the small cap space.1 This 1Q17 Small Cap2 edition of the Factor Alpha Newsletter (see also: All Stocks & Global Large Cap) compares our proprietary multi-factor themes3 to the Russell 2000® Value Index (R2000V).4

Continue reading “2017 Factor Alpha Newsletter
Small Stocks”

A Factor Investor’s Perspective
on the Economic Cycle

Categories Author: Ehren Stanhope, Investing, Momentum, Quality, Value

diagram

“If you spend more than 13 minutes analyzing economic and market forecasts, you’ve wasted 10 minutes.”

— Peter Lynch

Though unpredictable, the economic cycle has significant implications for investors. Given the vast amount of evidence that certain themes consistently outperform — and underperform — throughout the cycle, an allocation to passive market cap-weighted indexes almost seems naive. Continue reading “A Factor Investor’s Perspective
on the Economic Cycle”